The data may not tell the whole truth…

I have heard the statistic being promoted many times during this election campaign that the true unemployment rate is more than 40%.  Meanwhile, the Bureau of Labor Statistics recently reported that the unemployment rate is 4.9%.  How can we rationalize the difference? 

One great way to look at the data is to review the Pew Research Center’s 2014 study on demographics in America.  See:  https://www.pewresearch.org/next-america/. This report shows that we can see that the age distribution has varied widely over the years.

Today, individuals 65 and over represent almost 15% of the US population.  Individuals under the age of 20 are 25.8% of the population.  Together, they represent about 40.65% of the population.   I’d expect that a good proportion of these people do not work.

I’d also expect that there are plenty of people between 20 – 64 that are not working.  These people may not work for a number of reasons, raising children, taking care of parents, living on just the spouse’s income, going to school, etc…

The truth is that probably 40% of Americans are NOT working and therefore unemployed.  Much of this is not a reflection of the economy; it is a reflection of their choice.  This is why the BLS has statistics to measure unemployment that remove the people that in the workforce that are not currently looking for a job - https://www.bls.gov/news.release/pdf/empsit.pdf